On Our Radar

On Our Radar

Don’t Forget to Fuel Up!

We all travel different roads in our lives. Some of us prefer to travel a nice country road, while others stick to the interstate. Our lives are all our own; individual, unique and like no other. Our roads to retirement are just as unique as we are. We all need to plan for the eventuality of retirement.

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Our ability to set money aside for retirement is as varied as are our need for what we feel a comfortable retirement would be. In any case, we need a good road map to get there; we need to plan the trip out to arrive at the scheduled time. The earlier we get the map out and plan the trip, the better off we will be. Times are different today. What will Social Security look like when we are ready to draw on it? Will we be able to begin drawing on it as soon as we thought we could? Which Social Security income election option should you choose? Will Social Security even exist in the future? In truth, Social Security was intended for a subsidy toward our retirement, and not our retirement in its entirety. It should be looked at as a side road along the way-- not the main thoroughfare.

No matter who we are, we need to plan for our future: the sooner the better. How we develop that plan depends on many factors, such as age, years remaining until retirement, financial situations, liquidity and so on. Based on these facts, we can develop our tolerance for risk.

Investment vehicles vary greatly and cover a span as large as going from a Ford Focus to a Ferrari. Is your financial situation something that warrants accepting more risk, such as in the stock market? Are you younger and just entering the work force--able to drive the Interstate--or are you older, retired, or nearing retirement and need to be more risk-averse on that country road? Whatever your retirement vehicle, it should be equipped with no-risk assets, which should become a larger percentage as we get closer to our destination. Principal protection and income guarantees: these are our seat belts and air bags.

One option one might try is an IRA. This is not so speedy, but you can get an IRA on a post-tax (Roth) or pretax (Traditional) basis. Investment options range from money market rates to mutual funds. If you want to get a little more acceleration out of your vehicle, you can look at rolling your current model at time of retirement into an annuity that guarantees a rate--but could let you move up with the market if the index outperforms the guaranteed rate.

If you are at an age where you may need that wagon or SUV to get that young family around, then set money aside for retirement in a Fixed Indexed Universal Life policy. With this vehicle, you could help fund your children’s college tuition while planning a Tax-Free Retirement for yourself. Fixed Index Annuities or Fixed Indexed Universal Life Insurance could turn your SUV into a Porsche Cayenne and get you to a comfortable retirement. There is a lot to consider on your road to retirement.

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If these roads are new and unknown to us, we may need to consider that road map, or even find a navigator to help. That navigator should be someone who knows the financial products available and will fill the potholes along the way. Find a navigator that you feel you can trust, one who is working for your goals--not just their commission. Let them show you all the available options for your retirement vehicle. Make an educated choice. Once you’ve figured out which vehicle you’ll need, remember to fuel your retirement account along the way--so you can enjoy yourself when you arrive.